Louisiana's attorney general has filed a lawsuit against UnitedHealth, alleging the payer inflates prescription drug charges in the state’s Medicaid program, Bloomberg reported April 20.
Louisiana Attorney General Jeff Landry accused UnitedHealth's pharmacy benefits manager, Optum Rx, of using secret prices and the complexity of the supply chain to cause the Medicaid program to needlessly pay billions of dollars more per year for prescription drug benefits, according to Bloomberg.
UnitedHealth is one of several companies Louisiana hired to administer Medicaid, according to the report. Contracts require the companies to spend a minimum share of their premiums on medical care. Mr. Landry alleges that Optum, which does not need to abide by that requirement, had an incentive to inflate its drug costs to help UnitedHealth meet its required spending.
The lawsuit accuses UnitedHealth of breach of contract and violations of the Louisiana Unfair Trade Practices Act, according to Bloomberg.
UnitedHealth told Bloomberg that its services are performed in accordance with state regulations and the Medicaid program’s requirements outlined in its contract. It said the lawsuit is without merit, and it will defend itself against the allegations.